The largest asset manager, BlackRock has warned the U.S. SEC that classifying Bitcoin as security will cause difficulties and trouble in trading the asset.
In its updated spot Bitcoin ETF filing of December 4, BlackRock stated that, “If a digital asset is determined or asserted to be a security, it is likely to become difficult or impossible for the digital asset to be traded, cleared or custodied in the United States.”
The asset manager believes that Bitcoin’s classification as a security will have a negative effect on its market. Such enforcement action on Bitcoin will largely impact on its price as well as its underlying financial instruments such as spot Bitcoin ETFs.
“A determination that bitcoin or any other digital asset is a “security” may adversely affect the value of Bitcoin and the value of the Shares, and result in potentially extraordinary, nonrecurring expenses to, or termination of, the Trust,” said the filing.
BlackRock further pointed to the Ripple (XRP) case which had been long-involved with the SEC lawsuit on whether its security or note. Ripple had a market cap of over $100 billion which fell to merely below $10 billion after the SEC’s security lawsuit.
While crypto analysts are predicting that the regulator will approve at least one spot Bitcoin ETF as early as January 2024, BlackRock has highlighted a major issue of the uncertainty over Bitcoin’s classification.
Also Read: Fidelity and SEC Convene Over Bitcoin ETF Application
